U-Haul Holding Co (UHAL) 2019 Q4 法說會逐字稿

Good morning, and welcome to the AMERCO Fourth Quarter Fiscal 2019 Year-End Investor Call. (Operator Instructions) Please note that this event is being recorded.

I would now like to turn the conference over to Sebastien Reyes. Please go ahead, sir.

Good morning, and thank you for joining us today. Welcome to the AMERCO Fourth Quarter Fiscal 2019 Year-End Investor Call.

Before we begin, I'd like to remind everyone that certain of the statements during this call, including, without limitation, statements regarding revenue, expenses, income and general growth of our business, may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Certain factors could cause actual results to differ materially from those projected. For a discussion of the risks and uncertainties that may affect AMERCO's business and future operating results, please refer to Form 10-K for the year ended March 31, 2019, which is on file with the U.S. Securities and Exchange Commission.

I'll now turn the call over to Joe Shoen, Chairman of AMERCO.

Good morning. The moving equipment rental market remained very competitive all this past fiscal year. Still, we were able to grow both company-owned and dealer locations. We are continuing to reinvest in our moving equipment rental operation.

Repair expense remained higher than I am comfortable with. We are presently revamping or expanding 5 large repair hubs. This should help our results 12 to 18 months down the road. At the same time, unfortunately, the original equipment manufacturers are again changing their drivetrains and bodies, which will no doubt increase our repair costs and probably our acquisition costs.

Our existing self-storage locations are solid. However, there is a tremendous amount of new product that has come online and still more in the pipeline. We continue to see what we believe are expansion opportunities for our network, and so we continue to add units in various markets. U-Haul's year-over-year growth in occupied storage units still needs to increase. We consider self-storage strategic as well as opportunistic. We will continue to grow rental and storage locations over fiscal year ahead of this year. Likely, storage units added will continue to outstrip units rented year-over-year.

Jason?

Thanks, Joe. Yesterday, we reported fourth quarter earnings of $0.04 a share compared to $0.56 per share for the same period of fiscal 2018. I'm going to go through a few of the adjustments here to get us back to more of an apples-to-apples comparison. So for the fourth quarter of fiscal 2018, we have recorded an additional net tax benefit of $16.5 million related to our insurance companies recognizing the Tax Reform Act. If you exclude this item from the previous year, we had adjusted losses of $0.28 per share. Again, that's compared to earnings of $0.04 a share this year.

For the full year of fiscal 2019, we reported net earnings of $18.93 a share compared to $40.36 per share for all of fiscal 2018. 2018 results included 2 large significant likely nonrecurring events. One was the sale of part of our Chelsea, New York location. We recorded a net gain -- a gain net of taxes of $7.34 a share. The other event was the Tax Reform Act. And for the full year, the net benefit to us was $18.16 per share.

So we think a useful supplemental measurement is to look at our earnings excluding these items, which results in adjusted earnings per share for the previous year of $14.86. That's -- again, that's compared to this year's results of $18.93. And we have a reconciliation of these amounts included in our press release as well.

Moving on to the business. Equipment rental revenues increased just about 7% or over $34 million for the quarter. And we finished the full year with $174 million increase. Again, close to 7%.

During the quarter and for the full year, our In-Town and one-way revenues both increased as did the number of trucks, trailers and towing devices in our rental fleet. We also saw an increase, as Joe mentioned, in the count of our independent dealers and company-operated locations.

During the end of the third quarter and into the fourth quarter, we experienced increased corporate account activity or what many of you might refer to as last-mile delivery business, which accounted for a portion of the fourth quarter improvement. It is possible that we will see some trailing repair costs associated with these rentals here in the next quarter or 2.

U-Move revenue growth has continued into the first half of the upcoming quarter. Capital expenditures on new rental trucks and trailers were $1.163 billion for fiscal 2019, that's up from $1.007 billion last year. Proceeds from the sales of retired equipment also increased from $491 million to $603 million as we made progress normalizing our resale schedule recovering from the effects of the OEM recalls the previous year.

Our initial projection for rental CapEx in fiscal 2020 contemplates an increase in box truck spending. We're estimating a gross spend of about $1.3 billion. We're also projecting an improvement in proceeds from the sales of equipment, which combining the gross spend and the sales, we're expecting net fleet CapEx somewhere around $700 million.

Storage revenues were up just under $12 million or 14% for the quarter. And for the year, we finished up $43 million, close to 13%. A portion of the revenue gain -- a large portion of the revenue gain came from growth in occupied rooms. If you look at our occupied room count at March 31 compared to the previous year at the same date, we had an increase of 35,400 occupied rooms. That spread from the previous year has continued to widen now into April and May. If you were to go back a year and look at that statistic, we were up 23,000 rooms last year at this time. We're also continuing to see an improvement in our underlying revenues square foot from increasing rates on most of our in-place locations.

I want to give you a little bit more information regarding our reported occupancy figures. Our reported occupancy, our average occupancy throughout all of fiscal 2019 was just under 69%. I've been providing some additional color on the occupancy for facilities open 3 years or more. So for those locations that were open at least 3 years as of this time last year, their average occupancy here over the last year increased about 130 basis points to just under 86%.

Our real estate-related CapEx for fiscal 2019 was $1.003 billion, that's up from $607 million last year at this time. During all of fiscal 2019, we added just over 5.3 million net rentable square feet to the portfolio with about 1.5 million of that coming online in the fourth quarter.

Operating earnings in the moving and storage segment for the quarter increased by $24 million to $13 million and for the year -- I'm going to exclude the real estate gain from last year -- for the year, increased $52 million to $569 million.

I want to go through a couple of the expense highlights here for the quarter. The largest improvement for the fourth quarter of this year -- for the fourth quarter was the reduction in personnel costs. During the fourth quarter of last year, we paid a $20 million bonus related to income tax reform. This did not recur in fiscal 2019. If you exclude the variances from bonus compensation, personnel cost as a percent of total revenue were still in line with the fourth quarter of last year and for the full year.

For the quarter, our total fleet repair cost were up about $3 million and, for the year, up $46 million. While we feel we're continuing to make progress on this front, nearly all of the improvement for the quarter came from the reduction in volume of units being prepped for sale. We are continuing to work on lowering the cost incurred per truck.

Depreciation and lease expense associated with the rental fleet increased $2 million for the quarter, and we were up $13 million for the year. We have continued to invest in the fleet, which resulted in the average fleet size over the course of all of last year being up close to 3%. And if you look just point-to-point, end of the year versus end of the year, up closer to 3.5%. Gains on the sale of rental equipment were flat for the quarter and up over $15 million for the year.

A few additional operating expenses that we saw increases in during the quarter included shipping and fuel costs associated with the delivery of our U-Boxes, legal and professional fees and property taxes and utility costs.

One -- also of note, during the fourth quarter, our insurance subsidiary, Oxford, terminated a reinsurance agreement on a block of life insurance policies. The accounting for this termination and the transfer of the reserves and the underlying assets back to the other party led to some odd-looking premium and benefit results for the quarter. But at the end of the day, this resulted in a small gap gain for Oxford for the quarter.

During the fourth quarter of fiscal 2019, we declared a $0.50 per share cash dividend that was paid in April. That brings the total amount of cash dividends declared for fiscal 2019 to $2 a share.

And finally, at March 31 of this year, cash and availability from existing loan facilities totaled $725 million on our moving and storage segment.

With that, I would like to hand the call back to Nancy to begin the question-and-answer portion of the call. Thank you.

(Operator Instructions) And the first question comes from George Godfrey from CL King.

On the fleet repair maintenance expense on a per truck basis, Jason, can you comment what is preventing that -- or keeping that elevated today and preventing you from lowering it today and what you can do in the future to bring that repair expense down on a per truck basis?

Well, a per truck basis isn't actually how we do it, we do it on a per mile basis. But as Jason alluded, we saw a big spike, basically, 24 months ago with costs of getting vehicles back to condition to sell. And that came down but not as much as I believe it could come down over the last 12 months. And it's still falling. We don't quite know where it's going to even out. We're doing a better job of managing that. So that component is going to be stable or down, hopefully. Otherwise, we're running more miles -- we run more miles, we pay more maintenance. It's about that simple. It varies pretty linearly.

The biggest thing that impacts maintenance cost is what we buy new and how much commonality there is between them. And right now, the OEs are in another cycle of changing everything basically, they're responding not to what their customer wants but to what the government wants. And so they're adding a lot of content, this unneeded and unused by our customer. And they also are continuing to pull weight out of the vehicle, and very simply, the more weight you pull out of the vehicle, the more vulnerable it is to in-use damage.

So those are long-term trends that we're just going to have to continue to buck, and there's no getting around them. We're working at expanding -- have been now for 18 months, we're calmly expanding our owned and I think we'll expect company staff maintenance facilities to pull more repair in. When we do it ourselves, most of the time, it's less expensive. And so we'll be -- we have, depending how you want to count it, maybe 70 million of repair that we could pull into our shops if we have the capacity. It's a very specific problem because you have to have the capacity where you need it. But we're going about that, we're invest -- it's capital expenditures of basically facility. And we have 5 of them well in progress. And I don't know what the total cost would be, but $15 million or $20 million, maybe $25 million before we're done. But those will be long-term assets and those will help us send less maintenance to outside places, which will result in some modest amount of cost savings.

Understood. So just so I'm clear, say, 24 months -- the 24-month period prior to the 24 months ago, so going back 48 months, the trucks were less susceptible to damage on a per mile basis, could be repaired more easily because there was commonality across the truck and chassis. Now because the trucks are lighter, they get damaged more easily, and you can't get economies of scale or synergy on new trucks because those are changing, and we're going to address this by repairing more of the trucks in-house ourselves, and that's how we're going to bring that cost per mile down because it doesn't sound like if the trucks are lighter, they're still going to be more vulnerable to damage on a per mile basis. Do I have that right?

Yes. I believe that's just the long-term trend, and it's going to continue. And you can pretty much figure if you bought a car, you kind of know the deal, the price of the car goes up and the price of repair on the car goes up even more than the price of the car. So these are just things we have to try to manage, and there is no magic solution to them.

But if this was -- if they were increasing content in doing something the customer wanted that we could charge for, okay, that would be just fine. But most of what you're seeing, the automakers, they're kind of in a real vice with the government. And so they're responding with additional content, which is aimed at things like autonomous vehicles and less weight, and both those things are basically irrelevant to our customer. But they raise our costs.

The next question comes from Ian Gilson from Zacks Investment Research.

An easy one first, the termination of the life insurance contract, is that going to have any significant impact on future revenue in that sector?

Ian, this is Jason. No, it will go down a little bit. I don't think it's going to be appreciable. Wish I could give you a specific number on that, but I don't see that affecting the profitability over the revenues significantly.

Okay. In the fourth quarter, did we sell more trucks than the year ago?

No. We sold fewer.

But the cost was still up slightly in the quarter versus a year ago. So the cost per truck increased? Is that correct? ?

Well, Ian, there's a few things going on. A lot of the increases in repair costs over the last 20 -- of the 18 months has been from getting trucks ready for sale. But the vast bulk of our repair and maintenance cost is associated with just preventative maintenance. And we have a fleet that's about 3%, 3.5% larger than it was the year before. We're seeing more miles driven. That's resulting in additional preventative maintenance cost. So when we look at just the increase in absolute dollars year-over-year, much of that is associated with having more fleet than doing the preventative maintenance on the fleet.

Okay. What were the truck sales in the quarter total?

I will find that for you right now. Are you talking about gross proceeds?

Yes.

For the quarter, about $44 million.

Okay. How many dealer locations did we have, independent dealer locations, at the end of the year?

Just over 20,000.

Just over 20,000. Well, I think it was the same number as last year.

Yes. We're up very marginally. Let's see -- we'll see if we can give you an exact number. I don't know if we can...

Yes. Last year, at the end of the year, we're at 19,925. This year, at the end of the year, we're at 20,022. So about 100 net.

Okay. Looking at the self-storage and looking at a revenue per room basis, that was down in the fourth quarter on a year-over-year comparison. Is there any particular reason, the weather, the flooding, anything in there?

Excuse me. I'm sorry, Ian. Over the last year, I think we've added just close to 112 new locations into our self-storage pool. I think a combination of new locations with very low occupancy and the markets that they've been open in has had some effect on our average revenue per foot or, as you put it, revenue per room. If I look at the locations that were opened last year and see what their revenue per foot is last year to this year, we're seeing about a 2% improvement in revenue per foot on the locations that were existing 12 months ago. But I'd say -- and to your other point, the amount of discounting or first month free that we've averaged this year to last year isn't that much more.

Okay. Great. So you don't think that the flooding in the lower Midwest -- I know it floods every year in St. Louis, but the expansive sunning does not have a significant impact to -- going into the first quarter?

I don't think it is, Ian. We have had a couple of tornado problems, and they've wrecked a couple of buildings. But that kind of just goes into the whole equation, and it should work itself out. So nothing that I would say would impact overall results. No. I mean sure, there's weather events, but sometimes, you pick up customers, too, because they lost their roof and so they come rent a room. It's not just a -- it's not really clear. When you get to a location by location basis, you can see it. But in the big numbers, it's not significant.

The next question comes from Jamie Wilen from Wilen Management.

A couple of questions. I'll start with the truck rental side. The fleet is up 3.5%, our revenues are up 7%. Is that differential, that gain in market share, related to volume? Or is most of that price?

It's almost 50-50. I think it's about 3% volume and 3% price. I think it's -- you'd have to split it. You're going to get some variance in particular, but that's an overall number that puts you in the ballpark.

So fleet utilization is about the same [year-over-year]?

Yes. It might be up a little teeny bit. We're a tiny bit below where we want to be on fleet utilization, and that's always a work in progress, and we've never been happy with our fleet utilization. But it's -- I think it's very much stable overall to last year. Jason?

We did see improvements across just about every truck model. We did see some improvements in utilization.

But we're talking decimal points. Trust me, okay?

Got you. Ian asked a question about -- I thought about the gross proceeds per truck in that you -- your truck sales in the fourth quarter were higher, but the units of sales were not as great as last year. So the dollar price per what we sold is moving a little bit higher?

Yes. That's correct.

Yes, it is. And the only question is, are we spending $1,000 in prep for sale to get $900 in increased profits or are we spending $1,000 to get $1,100, okay? And that's always a little easier to know after the sale than it is going into it. So we're attempting to prep for sale and balance the expense to what the -- what we do to improve the resale value. And it's a little dance. And we did a little bit better -- we did quite a bit better, I think, if you look just at the first -- or the last quarter of this year compared to last quarter of the prior year, we did better on a per truck basis on much less -- much fewer places, and I'm just absolutely offended by the result; and more places where I'm pleased with the result. But we still -- I think we -- I know we have room to improve, it's just a question of can we manage to it.

Jamie, to your question, I just wanted to clarify. We did about half the number of sales in the fourth quarter of this year as we did the fourth quarter of last year.

Okay, okay. Moving over to self-storage. One of the things -- you're very good at running truck rental and self-storage facilities, and you talk about how efficient you are at running self-storage facilities. We don't really manage much outside for others. What's the thought of utilizing our expertise to manage for others where we don't have the capital involved, we don't have to wait for the lease-up, so it's an instantly profitable operation, everything is in place, it seems like a nice adjunct for our business?

Jamie, at one time, we had about 100 locations under management. And I'm going to -- and my memory is not totally clear. But for 6 or 8 years, we ran pretty -- and at that time, we had less storage, so we had a significant amount of storage under management. And I don't think we made much money at that, if any at all. The fee for managing is pretty established, and it's somewhere, depending on who you want to talk to, 5% or 6%.

Now when you get into what Extra Space is doing, they're -- they have a -- I hope it works out for them, I guess. They are collecting a substantial upfront fee in most cases, which is smart business. I'm talking $50,000 or greater. We had very little success getting that from people now, Extra Space has broken that pretty well.

My experience is for 5%, you're going to spend 5%, basically. And we changed our model after we got out of that to what we call storage affiliates, where we have a group of self-storage locations for whom we provide a business platform, which includes a web presence, a point-of-sale management presence, a modest accounting package and then a variety of other services like mailing, insurance. We think that, that is a more scalable program, and we think that it is more likely to, over the long term, produce a profit and also, continue to grow our brand awareness.

But it's just a different approach, and I have no reason to believe that -- I think that both Extra Space and CubeSmart are real strong right now in this managed, and I heard something lately that Public is going to try to do some. So it's just -- my experience with it wasn't real good. We did , in my recollection, it was about 1992 through 2002 or '03, something right in there. I could be a little bit off on the dates. And as I said, we had a little over 100 locations across the country and didn't feel it was really contributing.

Okay. In the last year, you spent about $1 billion for self-storage units, new facilities.

Well, that's really stated in total. And so it's a little bit of a confusing number. I looked at that and then -- so then what we have spent per unit would be a bit -- that would be a bad assumption to divide 1 number by the other because -- but go ahead, I'm sorry I shouldn't have cut you off. What was your question?

Okay. Well, the question is if I read the statistics in there, the initial occupancy of those units was about 9.5%. We're doing very well at managing our existing centers, but as far as capital allocation strategy, it seems like we are spending more and more, which obviously reduces our occupancy rates, reduces our profitability of the whole. Wouldn't it be wiser to let more of these units mature as opposed to so aggressively spend on new units? I understand it takes a good 3 years to 4 years before these things turn into the cash machine that they will be. But so much of our spending in the last few years has kind of overwhelmed our existing units. And wouldn't we like to let them mature, become more profitable, get our occupancy rates up close to that 80% level that their overall company could do? We would have investment spending, but we would turn this into a much more profitable enterprise, which now because of the amount of expenditure in the last 2 or 3 years, which are unproductive, it's not really happening yet.

That's a -- it's a fair question. I don't know that there's a single answer to it. There's a bunch of different things happening on the storage business. And one is, of course, everybody whoever built an apartment or built a multifamily home is now building self-storage. And that's having a very clear, what should I call it, a negative effect with the land-use people in all these municipalities. And now we're seeing more and more places declaring self-storage moratoriums. They're simply closing the door.

Now how long that will go on, it's hard to say. But Oakland had one for at least -- Oakland, California for 8 years. New York put one in, and then it kind of got pushed back politically. We didn't get that done, other operators did. But that - New York City was doing that. My mind is not clear, but there's -- a number of municipalities across the country that are doing that. And those that don't have an outright ban are just making it hard. So there's a little bit of opportunism.

And then this last 18 months, we had a lot of or more than an average amount of big-box retailers have their demise. And so we view that as an opportunity, and we kind of jumped in with both feet at both locations. Most of them had land-use and had a shell up. So they're coming on a little faster. I'm hoping to see them productive in 24 months rather than 36 or 48. So we took a little bit of opportunism, and I'd have to take a guess at that, Jason, that might be totally on those kind of locations $400 million by the time we're operating, maybe a little more.

Yes. I don't have the specifics but it sounds like in the ballpark.

Pretty good -- but a substantial amount of money. And so as I said in my prepared remarks, we're a little bit strategic. But yet, still, there are some opportunism. And I would say that the big boxes we view it as an opportunity and we jumped on them now. Only time will show if that was smart or foolish. Of course, we think it was a good move. We're still pushing and based on what we have in the pipeline, what I know of, we will add more rooms this year in absolute numbers. Then we will fill by a margin big enough that you'll be able to see it in the big number, okay? So I -- it's...

Say that, again, Joe, you will construct more rooms than you will fill? Or you will fill more rooms than you will construct?

No. We will construct more rooms than we fill, again, in the next 9 months of this fiscal year. I can see what's on the -- in progress. The next 9 months is starting to firm up, and you can kind of tell what's going to happen. And we're going to build more than we fill.

Now we're increasing our rate of fill, and I've been -- very clearly understood what you're talking about and focused on it for 18 months. And we're pretty consistently up every month over the -- our rate of fill is increasing steadily. We're steadily increasing the rate of fill, which you should as you add storage because now you have more points. You see that you're renting out of -- that they are disadvantage, but they're an advantage in the sense it puts you in a market that you're not already in.

And so I have a lot of anecdotal information that shows we're going to do okay with this, which is why I have the courage to proceed. But yes, what you're seeing right now, which is more units added than we're filling. So we're proportionately losing occupancy percentage if you were doing it for the whole gross rate. That's likely to be about the same statistic for the next 9 months, for the next 3 quarters. I think it's pretty consistent.

Now what will happen when we come into next May, in other words, coming into our second quarter, which we're coming into now, that, of course, I'm thinking that we may start to see that normalize about that time and...

And what would normalize be if we're spending $1 billion now?

Well, I don't know what it will be in money. But in other words, we'd be filling rooms about as fast as we're adding, so -- which should be kind of sustainable depending on capital markets and all that. We've been blessed with good capital markets, good access to financing, good length on the notes. So we got what we consider to be very good matching of what our revenue profile is going to be with what our fixed expenses as far as that goes. We have pretty good matching on that. We're pretty comfortable with that at least looking out 5 or 7 years.

Okay. And Jason, the profitability ramp of -- let's say, the grouping of self-storage facilities we opened 4 years ago, are they profitable today?

Yes. So we've been tracking those and consistently now, once these properties or these acquisitions are hitting their third year as a group, they're hitting positive, this pro forma NOI that we've talked about. They're profitable. So we started -- and we've talked about this in the past, we started tracking these when we started really doing a lot of conversions and ground-ups in the fourth quarter of 2015, so that there's -- now we have -- we're up to 17 groups of these properties that we're tracking, one for each quarter. And it's fairly -- I mean it's -- so far, it's right on for every one of those groups. Year 3, as a group, they're averaging close to 70% occupancy, and they're breaking into positive NOI territory. And now what we're seeing is that in the last year, we added 126 new acquisitions into this tracking pool. And the previous acquisitions were able to offset the losses from those, and we still posted an improvement in NOI as a total group. So the older acquisitions and development projects are starting to help offset the strain from the new ones.

Okay. And then lastly, as shareholders, we get very little credit for what you're building in self-storage. You're doing a good job of running it. Obviously, you're doing a lot of investment spending. But when I look at Life Storage, which has 50% more revenues than you but has a market capitalization of $4.5 billion, so if I just did that math, it would say your self-storage is worth $3 billion, forgetting about what the rest of the company is that we have a great position in truck rental. But how are we going to ever realize a business in self-storage, which is very cash flow oriented as opposed to the rest of the business, which is profit oriented? We don't have to repaint and remodel storage centers once they're up. But how do we capture more of the value for shareholders in operations, which is much greatly related to the cash flow than it is to earnings?

Well, that's kind of the 64,000-dollar question. We will make good earnings on these places. We're, right now -- of course, the one that everyone tells me is why don't you read out half the company. And every time I've looked at it, I've come away glad I didn't. But there's no question there's at least a onetime pop in that. But I think that we're going to see -- I see this much more at a granular level, at the store level. These things end up making good profits as a business unit, and that good profit should translate now.

Then that gets to what's the multiple of earnings that investors are going to put on a profit, a stream that's mixed truck revenue and self-storage. And that's a -- I think there's no question that presently it's a lower multiple and that we can dance around it, Jamie. But I think that's just really is -- that's just the truth, and I think you're seeing that from the other side. So I don't have an answer to that.

Okay. And then lastly, we would appreciate if you could change the corporate name to U-Haul so that everybody could see one of the world's most widely recognized brand names as the name of our company.

Okay.

The next question comes from Craig Inman from Artisan Partners.

A question for you on just leverage. It's been kicking up over the last, I don't know, 5 or 6 years. And EBIT hasn't run as much as the debt has. Can you talk about how comfortable you are with leverage levels currently?

Craig, this is Jason. So at the end of the year, we had about $2.3 billion of real estate debt and about $1.8 billion of fleet debt. So from a -- one of the ways that we measure our comfort level there as far as total debt goes is kind of an EBIT -- EBITDAR to total debt. And on that measurement, I think at our current cash flow levels, we'd be comfortable with maybe another $400 million -- or $500 million.

Now underneath that, what we're trying to manage within a total debt number is trying to spread out our maturities such that we don't have any more than, say, $250 million to $350 million of maturities in a year. So that we can always manage those should there be a disruption in the financial markets. And something that we've done now in the last year or so is we have gone out and got financing on some of the properties that are in development. And we've created a few more maturities in the next 4 to 6 years than what we would normally have. So we're focused on filling those rooms and spreading those out. So I hope that helps to answer the question.

Yes. Yes, it does. I mean it's just we have all the land and buildings and we have assets, but we don't have quite as much earnings and the debt has kicked up. But -- that's why I was asking. In terms of -- how would I frame this, financial scorecard, what you get at the end of the year and you look at the business, what are the metrics you all look at to give yourself a grade?

Well, just from -- this is Joe. I look at utilization of the fleet and our occupancy in this various locations very simply. Now that's not a -- it's not a published financial number, which is -- that's kind of a -- so it's a bad answer for you. You actually want to know what I look at. Then I -- then we break this down in a series of zones, and then we break it down to individual locations.

So at the individual locations, for example, I've got an asset or a cost to my asset, I've got my personnel and then I can see what my revenue is from the different revenue streams, which is basically truck rental, which has inside of it some multiple revenue streams; self-storage; U-Box; moving supplies; and then hitches and towing devices. Those are the major ones. Propane, I don't look at so much. I look at it, but I'm not focused on it real hard.

More than anything, I think, we'll keep trying to keep a good eye on the risk. So this goes back to your original question on leverage is you want to have enough but not too much. And so you're trying to assess the risk and where the different things that are coming at us are from. And of course, if you read the newspaper or watch TV, you figure we're going to either get snookered by somebody, some version of Lyft or whatever the other rideshare company is, and there's a whole -- there's 10 startups trying to edge into our business. And we'll see how that turns out.

And then of course, there is this whole deal that they're trying to push on is with electrification, electrification deal. A catastrophe, I don't have the words for it in this business, it's so far from practical. Now that doesn't mean we're not participating, and we're not trying to learn. But as far as actually doing that today, it would be devastating to our company and probably to a lot of others. But -- so that these are risks we want to try to assess and make sure we're not totally in the way of it, standing on the track when the train comes through.

That's why I mentioned in my prepared remarks this amount of storage that's out there in the pipeline, it's a real risk because finally, when they finally get to oversupply, it's going to be ugly on some specific markets. Now I'm not seeing a bunch of it, we're -- we think we're aware of it. I know that the other majors, the other people in the storage are aware of it. They're trying not to be the one who precipitates, yet we're all kind of in a foot race.

So more development is done by independents. I would say a figure of 3, Jason, and by the majors, maybe more. So I don't have a good statistic on it. But they're very much unknown here. And the statistics I see while they're better, they're still really not accurate statistics on what's coming down the pike. Jason showed me some numbers the other day that -- correct me if this is wrong, Jason, it said they estimated 5 million square feet coming online?

No, 30.

30 million, 30 million coming online. That's got to be low. That's got to be low from what I see. I try to be informed, but I don't have a -- I can't show you a spreadsheet. But I know how much we're putting in, and I look at that, no, there's way more than that coming online. That will -- that's going to -- that's not something I can impact very big, but I try to be in a position where I'm not going to be, as I said, standing on the train track when the train comes by. So that's a metric I'm looking at. Well, that's a bunch of nonanswers to your question, I guess.

What about just at the financial level, ROA, ROE, internal capital for a scorecard idea?

Well, of course, we look at it. But I don't know that we -- I'll let Jason -- he's obsessed with this, so he's always bugging me on it.

Craig, it's kind of a sum-of-the-parts approach. So there's so many diverse economic models embedded in our kind of combined product offering. We're looking at each individual piece. The launch of the storage facility, we're looking at the return on the trucks. We're looking at the retail sales in relation to cost of goods sold, and we're looking at our insurance companies. And so on each one of those, I'm looking at those kind of an individual return basis and then seeing if that kind of make sense as we roll it all up and you can -- and then from that perspective, I can kind of tell if there's a big difference, then there might be some inefficiency in the capital structure from that point. But as far as one overall, do we sit down and just talk about the return, our return on assets or our return on invested capital, we're doing that at a very micro level every week but not so much at a combined macro level all the time.

Well I think that makes sense. You've got all the capital going to self-storage. It'll be hard to -- those numbers are going to be depressed, but I was just curious for the flavor. And did you all pay a bonus this year to employees?

Not in overall. We have thousands of people on incentive compensation. So yes, there's a bunch of incentive comp going out. If we can get things where I want them, I may declare a more broad bonus. But I'm not yet to where I feel that it's appropriate. If we get there, I'm all for it. The people who earn the money are spread to hell and gone in this company. They're in every little teeny town, and most of them are working for very reasonable wages. There's not a lot of overpaid people here.

And if we get ahead and I'm in a position to declare a bonus, I -- that's my predilection. But right now, I don't see us as ahead. We are ahead of last year apples-to-apples, which Jason tried to say. But it's very convoluted, and of course from your side, I guess you are always worrying, are we trying to frame it crazily. I would encourage you to go back and pull the press release from a year ago at this time, you said largely the same thing. So -- but we all hear what we want to hear.

So we're ahead of where we were a year ago, there's no -- I don't think there's any question at all, substantially ahead. And I feel very positive about that. Am I where I want to be? No, I'm not where I want to be. I'm a glass-is-half-empty guy, which I think is good for everybody. But so we are well ahead of last year by every simple measure, I think. And we intend to be in that same position or better a year from now.

Okay. Yes. I know the results are picking up. And -- but we would expect that if results are strong for bonuses to potentially come out for employees.

Yes, if I think it's appropriate. But we've got to get strong results first. But yes, I guess I would think it's appropriate.

And asking a follow-up question is Mr. Ian Gilson from Zacks Investment Research.

How much of that long-term debt is tied up on a mortgage-type basis?

The total real estate debt is about $2.3 billion. I don't have the exact count of how much of that is revolvers. I'll try to get that to you. Do you have another question in the meantime? Or I can get that to you offline. It's in the 10-K.

Here, just hold this one. The K is in front of you, maybe you can pull it out.

So of the $2.3 billion, the revolving credit on the real estate is $429 million. So the rest is largely mortgage-type financing, it's about $1.8 billion.

Is that tied up on more than 15 years?

On the mortgage-type financing? Yes. On those, I think the shortest term is probably 10 years. And our first maturities on those -- we do have some older ones that are starting to come due in 2021. But they reach all the way out to 2038.

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Well, this is Joe. Thank you, again. I appreciate your support. I'm a shareholder myself. I like to imagine we have a lot of commonality of interest. And I look forward to talking to you when we have our next call. Thank you, again.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Have a good day.